(April 29, 2011) When Kim Jong-il wants a piece of the action, it’s time to stop.
Lisa Peryman
News that North Korea’s Kim Jong-il wants to join the carbon credit market should be the straw that breaks the back of a scheme already plagued by corruption and fraud.
A suddenly eco-friendly North Korea at first seems risible but given the state of its economy—in tatters after years of flooding disasters and failed crops, severe fiscal mismanagement and sanctions for nuclear weapons testing (as well as sinking a neighbour’s warship)—North Korea’s interest in the United Nations Framework Convention on Climate Change is a smart move.
North Korea at present has registered three 7-8 megawatt hydropower plants for consideration by the UNFCCC, which represents the first step towards accreditation under the UN’s Clean Development Mechanism—a scheme that enables companies and governments in industrialized countries to essentially continue polluting if they pay poor countries to develop “clean”-energy projects, such as dams and wind farms. Selling UN-backed carbon offsets from a series of planned hydropower projects would allow Jong-il to skirt sanctions and generate some much-needed hard currency.
According to one estimate [PDFver here] , a typical eight-megawatt hydropower plant might yield North Korea around $327,000 in cash annually from the carbon credit market. But Jong-il’s money-making plan could easily derail: for instance, how will an isolated and closed-off Communist outpost like North Korea complete these projects without outside finance? And what would an intensely secretive and dangerous strategist like Jong-il do with the funds these projects might raise? The inevitable fear on the part of investors is that inflows of money desperately needed for food and health care will be siphoned off for nuclear weapons and missile development programs.
Ironically, if it did enter the carbon credit market, North Korea would have to submit to monitoring and auditing on an annual basis.
Some observers suggest an opening up on North Korea’s part—the most militarized nation in the world—is highly desirable for the rest of the planet. However, foreign-aid watchdog Patricia Adams asks who could be trusted to monitor the Hermit Kingdom? Buyers and sellers lack the incentive to police their carbon transactions, she says, which leaves regulation to official bodies like the UN, whose previous oversight record includes the staggering mismanagement of the Iraq Oil-For-Food Program.
A six-part investigation [PDFver here] by The Christian Science Monitor last year concluded carbon credits were a hive of fraud and villainy: “a ‘Wild West’ market ripe for fraud, exaggeration, and poorly run projects that probably do little to ease global warming.” It is little wonder then despots like Jong-il are keen to sign on.
By Lisa Peryman, Probe International
Further Reading:
The next big scam: carbon dioxide
Backgrounder: A roundup up of Carbon Fraud reports
Coming soon to a carbon market near you: regulation and corruption
At what cost are carbon credits funding hydro projects in the developing world
Categories: Carbon Credit Watch, Nuclear, Patricia Adams
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